Vanguard FTSE Europe ETF has been struggling with a downtrend since 2014

Jun 1st, 2016 – 1 Comment

Lower highs and lower lows are never very attractive


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Continuing the assignment from Roger to inspect a number of Exchange Traded Funds that were recommended on a website he was following I will examine the charts for the Vanguard FTSE Europe ETF (VGK NYSE) .

If you are so inclined here is a link to the portfolio for you to peruse. There are 1,240 stocks in the fund:

https://personal.vanguard.com/us/FundsAllHoldings?FundId=0963&FundIntExt=INT&tableName=Equity&tableIndex=0&sort=marketValue&sortOrder=desc

A review of the charts will help determine if this ETF will meet your investment criteria.

 

VGK

The three-year chart indicates that VGK has been struggling with lower highs and lower lows since June of 2014. There have been some buying opportunities but investors had to be fleet of foot to capture profits. The units hit a 52-week low of $43.47 in February of 2016 where they caught a bounce to resistance near $50.00.

The MACD and the RSI generated buy signals in February as VGK hit the 52-week low. What is also visible is that there is support that comes in near $48.00.

 

 

 

 

VGK2

The six-month chart highlights the resistance near $50.00 and the support near $48.00. The MACD and the RSI appear to be turning lower which would suggest a retest of support along the 200-day moving average and perhaps $48.00. The last twelve months have not been generous to investors holding this asset even if you take into account the 2.19% dividend yield.

From a technical perspective there are no patterns to motivate a buy decision at this time. Keep in mind one big overhang on markets in Europe is the vote in the U.K. concerning its continued membership in the European Union. That decision will come later in June and needs to be monitored.

Final note – you need to be aware of foreign exchange risk when dealing with assets priced in a currency other than the loonie.

 

Next time I will continue with Roger’s assignment and audit the charts for the Vanguard FTSE Pacific ETF ( VPL NYSE).

 

Make it a profitable day and happy capitalism!

Categories: ETF, Uncategorized
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